PSC recommends sharper increase in county water rates

By Erin Schmitt erin.schmitt@thegleaner.com 270-831-8341

10:04 PM, Aug 21, 2013

The state Public Service Commission has recommended the Henderson County Water District raise its water rates by 13.5 percent, though the local agency has only sought an 8 percent overall increase for its customers.

Last April, the county water district sent an application to the PSC for review to seek a rate increase to help pay for improvement projects. The district had not increased its water rates since June 2007.

“The consultant we used suggested that we could have had more of an increase than that, but we wanted to keep the rates low and we didn’t do that,” said district Chairman David Spainhoward.

The rate proposal was prepared by the engineering firm Kenvirons Inc., which is headquartered in Frankfort.

Customers with a 5/8-inch by 3/4-inch meter currently pay a minimum bill of $16.09 for the first 2,000 gallons. With the eight proposed rate increase, those customers would pay a minimum of $17.38.

The next 8,000 gallons would increase from $5.68 per 1,000 gallons to $6.13 per 1,000 gallons.

The average customer uses between 3,600 and 3,700 gallons a month. Henderson County Water District has 6,340 customers.

The PSC recently returned a staff report, which was discussed Wednesday night at the county water district’s meeting.

The agency came back recommending a 13.5 percent increase. While the staff doesn’t say the district has to take the increase, it is recommended, he added.

Spainhoward said asking for the higher rate hike was discussed initially by the board, but they felt that the rate shock to the customers could be too great and took into account that the district’s debt service payment doesn’t start until sometime down the road.

Aside from the 13.5 percent rate hike, the staff report including several recommendations it would like to see the district follow. The recommendations include developing and adopting a work order system that complies with the U.S. Department of Agriculture and documenting pay rates.

Now that the district has received a staff report, the next step is to comment and send the report back to the PSC, which they plan to do soon.

Most of the recommendations in the staff report from the PSC are reasonable or doable, Spainhoward said.

The board plans to include in its comments that the district accept the 8 percent increase now and, in about a year, take the remaining balance of the 13.5 percent recommended hike. Spainhoward said he’d spoken to PSC representatives and was told that could be an option, though it would ultimately be up to the agency’s approval.

“You never know for sure what that decision is going to be,” Spainhoward said.

The board passed a motion Wednesday night for Spainhoward and new county water Superintendent Peter Conrad to prepare a response to the PSC staff report.